Which Debt To Ditch First

You may have a number of debts that need paying off and it's always a tough decision on which to try and get rid of first or whether to 'chip away' at them all at the same time.  Everyone's circumstances are different but here are a few things to consider:

Debt Size

Which of your debts is largest?  It may sound strange but if the interest rate is low and it's over a long period, such as a mortgage, there may be other debts that can be tackled first.

Debt Period

Your debts will be over a set time period, some will be longer than others.  Just remember that the longer you take to pay off your debt the more you will pay.  This can be a difficult one, depending on size of debt.

Debt Interest

Which debt has highest interest payments?  Short term lending such as credit or store cards tend to have high rates of interest and are, on balance, worth tackling first.  As a first target - get your credit card balance down to zero and see how much you save each month!

Thinking about all your debts in these simple terms - just list them - can help you decide how you go about paying them off.  Remember, some debts may not allow you to pay off early (some loans) but it's always worth negotiating with the lender.

Spend a little time to save a lot of money!